By Alexander Miller, consultant in energy markets. Eurasia Business news, September 15, 2022
Gazprom reported on gas production and exports for the past eight months. From January 1st to September 15th, the Russian energy giant produced 300.8 billion cubic meters of gas. This is 15.9% less than last year. Exports to non-CIS countries amounted to 84.8 billion cubic meters, which is 38.8% less than similar indicators over the past year. In the domestic market, gas demand decreased by 3.3% (by 5.4 billion cubic meters).
Gazprom reported that gas exports to China through the Power of Siberia gas pipeline have grown, but did not give exact figures. The company added that deliveries in September are in excess of daily contract quantities.
Also, according to Gas Infrastructure Europe, the association representing the interests of European gas infrastructure operators, gas reserves in European underground gas storage facilities have been replenished by 58.4 billion cubic meters. Gazprom said that companies need to pump 14 billion cubic meters to reach the level of occupancy at the beginning of the 2019/2020 selection season.
“At the same time, even close to the maximum reserves in the UGS facilities of large European countries do not guarantee the reliable passage of the upcoming autumn-winter period,” the press service added.
Earlier, Gazprom reported that the EU countries reduced the supply of Russian gas to the domestic market by 48%, taking into account the UK lowered its Russian gas purchases by 49%, in spite of a high domestic inflation, hitting hard British workers and their families. The UK Consumer Prices Index (CPI) rose by 9.9% in the 12 months to August 2022, down from 10.1% in July.
On August 30, the Gazprom Board of Directors recommended paying the first interim dividends in its history for the first half of the year in the amount of 1.2 trillion rubles. The energy giant reported that for the first half of the year Gazprom received a large net profit, as for the whole of 2021 (2.09 trillion rubles). This happened against the backdrop of rising energy prices around the world due to Gazprom’s restrictions on fuel supplies.
Between October 2021 and August 2022, gas prices in Europe grew by 231%.
The spot price of gas in Europe crossed $ 3,300 per 1 thousand cubic meters on August 25. Prices are growing by more than 10%, according to data from the London stock exchange ICE Futures. At the moment, the cost of the September futures on TTF on the exchange reached $ 3,312 per 1 thousand cubic meters. This is the maximum level since March 7, when a historical gas price of $ 3,898 per 1 thousand cubic meters was recorded. In early October last year, gas prices crossed $ 1,000 per 1 thousand cubic meters, a record since March 2018.
However, the famous investment bank Goldman Sachs estimated on Tuesday that gas prices will be halved by the end of the year in Europe. Its analysts predict that the price of gas on the European market will rise from “215 euros/Mwh (megawatt-hour) at the end of this summer to less than 100 euros/Mwh in the first quarter of 2023”.
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